Before we get started, let remind you that today's conference call contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995 and include statements as to estimates, expectations, intentions and prediction of future financial performance. Statements that are not historical facts are forward-looking. Participants are directed to Trinity's Form 10-K and other SEC filings, for description of certain of the business issues and risks. A change in any of which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Good day and welcome to the Trinity Industries Incorporated Third Quarter Results Conference Call. Currently all phone lines are in a listen-only mode. Later, there will be an opportunity to ask questions during a question-and-answer session. [Operator Instructions] Please be advised today's program may be recorded. It is now my pleasure to turn the program over to Ms. Gail Peck. You may begin.

Thank you, Eric, good morning, everyone. Welcome to the Trinity Industries third quarter 2015 results conference call. I am Gail Peck, Vice President, Finance and Treasurer of Trinity. Thank you for joining us today. Just to note, we are experiencing severe weather in Dallas this morning. In the unlikely event that the call is disrupted, we will reconnect as quickly as possible. Similar to the format we used on our last earnings call, we're going to have two parts for a conference call remarks. First, we will begin with an update on the highway litigation matter; we will then follow with our normal quarterly earnings call format. Today speakers' are Theis Rice, Senior Vice President and Chief Legal Officer; Tim Wallace, our Chairman, Chief Executive Officer and President; Bill McWhirter, Senior Vice President and Group President of the Construction Products, Energy Equipment and Inland Barge Group; Steve Menzies, Senior Vice President and Group President of the Rail and Railcar Leasing Groups; and James Perry, our Senior Vice President and Chief Financial Officer. Following their comments, we will then move to the Q&A session. Barry Henderson, our Vice President and Chief Accounting Officer is also in the room with us today. I'll now turn the call over to Theis Rice.

Thank you, Gail, and good morning. For purposes of today's remarks, I will refer to Trinity Industries and Trinity Highway Products together, as the company, the Federal Highway Administration as the FHWA and the American Association of State Highway and Transportation Officials as AASHTO. I will also refer to Texas A&M Transportation Institute as TTI and the National Cooperative Highway Research Program Report 350 as Report 350. As previously reported, the company has received an adverse jury verdict in a False Claims Act case involving claims of fraud and product defect pertaining to the company's ET Plus guardrail end-terminal system. In June, 2015 the Federal District Court entered judgment on the verdict. Because the company believes the evidence presented at trial clearly showed no fraud was committed, the company has filed a notice of appeal with United States Court of Appeals for the Fifth Circuit. We currently anticipate the Fifth Circuit will issue a briefing schedule before the end of the first quarter of 2016, at which time we will better understand the timing of the appellate process for this matter. With respect to the product itself, the FHWA reported earlier this year that the ET Plus System has successfully passed eight additional crash tests performed in accordance with Report 350 test matrices, the applicable and nationally recognized testing criteria and performance evaluation standards. Additionally, an FHWA and AASHTO joint task force was formed to evaluate certain features of the ET Plus System. Upon completing its evaluation, the task force confirmed, contrary to allegations in the False Claims Act case, that there was no evidence of multiple versions of the ET Plus System and that the ET Plus Systems used in the eight crash test were representatives of the ET Plus System installed on the nation's roadways. The FHWA also…

Thank you, Theis, and good morning, everyone. I'm pleased with Trinity's financial performance during the third quarter. Our performance continues to reflect the strength of our diversified industrial business model and our ability to shift resources to meet customers' needs. I am proud of the performance delivered by our employees. Our Rail Group generated strong quarterly financial results during the third quarter, reporting a record profit margin for the second consecutive quarter. I'm impressed with the way this Group continues to maintain a high level of profitability, while shifting its product mix. During the third quarter, our Railcar Leasing and Management Services Group delivered strong year-over-year financial results. The Group's results were enhanced by sales of leased railcars. I remain pleased with the progress our team is making with high-quality institutional investors, who are looking to invest long-term capital and portfolios of leased railcars. We expect to continue growing our railcar investment platform. Our Inland Barge Group financial performance during the third quarter reflects the changing product mix. The Group continues to demonstrate manufacturing flexibility by shifting production lines as necessary to meet customer demands for specific barge types. The Energy Equipment Group set a new record for quarterly operating profit during the third quarter, substantially improving its results year-over-year. The successful integration of Meyer Steel Structures contributed to this Group's improved results. Our Construction Products Group's maintained a comparable profit margin on lower revenues compared to the third quarter last year. During the third quarter, an increased level of uncertainty in the macro economic environment reduced the pace of new order volumes in our business. As the quarter progressed, we observed an increasing level of hesitancy on the part of a number of our customers to make capital investments. The extended downturn in the price of oil, combined with…

Thank you, Tim, and good morning, everyone. During the third quarter, the Barge Group reported another solid performance. The Barge Group received orders for $84 million during the quarter, resulting in a backlog of $373 million. The majority of these orders were for barges serving the dry carbon market which continues to be driven by replacement needs in the agriculture industry. There is less demand for barges that carry liquid cargo due to the large number of tank barges delivered during the last few years. We are adjusting our production to better serve demand including idling one of our four manufacturing facilities. The investments we have made over the past decade have increased our production efficiencies and positioned us to respond effectively as market demand changes. We are prepared to make additional adjustments to our manufacturing footprint as needed. The Construction Products Group continues to make the most of a challenging operating environment. Despite the scheduled expiration of the Federal highway bill at the end of this month, and ongoing litigation matters, the Group maintained operating margins during the third quarter on lower revenues compared with last year. This performance is driven by the strength of the construction market in the Southern U.S., a proposed, long-term Federal highway bill would provide our customers the visibility to plan and fund infrastructure projects. We are closely following the status of the bill. During the last several years, we have been repositioning our Construction Products Group to focus on products with more consistent demand drivers. The aggregate business, an example of this focus has performed very well during 2015. And we continue to see positive near-term demand drivers. The energy equipment group recorded another record of level of profit during the third quarter. Most of the businesses in this group improved their performance quarter-over-quarter. The wind tower business continued to deliver solid results and had strong visibility for 2016 production plans. At the end of the third quarter, the wind tower backlog totaled $424 million. While the wind industry has made advancements in reducing the installed cost of wind power, near-term demand will likely be dependent on another Federal reduction tax credit. We are prepared to respond should Congress approve another tax credit in the next few months. The current market for utility structures remains competitive and has recently experienced some consolidation and industry capacity rationalization. We continue to see positive, long-term investment projections for this industry. The acquisition of Meyer Steel Structures, which we purchased last year during the third quarter, positions us well to respond to increased transmission infrastructure spending in both the U.S. and Mexico. In closing, our businesses are responding effectively to the mixed demand conditions. We believe these businesses have a great deal of potential as our long-term outlook for energy and infrastructure investment in North America remains positive. I will now turn the presentation over to Steve.

Thank you, Bill, and good morning. Our talented TrinityRail team delivered another quarter of excellent operating results, further testimony to the strength of our integrated railcar manufacturing, leasing and services business model. During the quarter, our Rail Group once again exceeded a 20% operating profit margin, and our Leasing Group generated another quarter of strong results. Our operating and financial flexibility and leading market position give us confidence we can effectively adapt to changing market conditions. As Tim indicated in his remarks, uncertainty exists in the industrial economy. As the third quarter progressed this environment, combined with the challenges of navigating new tank car safety regulations is creating hesitancy on the part of industrial customers while in the process of evaluating the capital equipment requirements. As the quarter progressed, orders slowed and have remained below recent order levels into the fourth quarter. It is too early to discern whether current demand conditions will persist. Our Rail Group received 3,655 orders during the third quarter. The orders we received during the third quarter represented a diverse mix of railcars, including tank cars, covered hoppers, flat cars and auto racks. As a reminder, our auto rack orders are not included in the ARCI industry order report. We continue to see inquiries among a broad array of railcar types reflecting a shift from upstream energy markets to downstream petrochemical and agricultural markets. The level of automotive related activity is also favorable. We remain optimistic about long-term demand fundamentals. These demand drivers, combined with the needs to replace aging general purpose freight cars continue to support our view of an extended railcar cycle. While production levels may be lower during the next few years compared with recent elevated levels, third party forecasts continue to expect above-average levels of industry railcar production through 2018. During…

Thank you, Steve, and good morning, everyone. Yesterday we announced our results for the third quarter of 2015. For the quarter, the company reported earnings per share of $1.31 and revenues of $1.54 billion compared to EPS and revenues of $0.91 and $1.56 billion respectively for the same period last year. During the third quarter, our EPS reflected strong operating performance on most of our businesses. During the third quarter, the company repurchased 1.56 million shares of its common stock for $40 million. This year, we've repurchased a total of 3.95 million shares of our stock for $115 million and have $104 million available under our current authorization through year end. We also invested $44 million in capital expenditures during the quarter, across a number of our manufacturing businesses and at the corporate level. Year-to-date, this figure totaled $145 million. During the third quarter, we invested approximately $223 million in leased railcar additions to our unleased fleet. This investment was offset by $219 million of leased railcar sales from our leased fleet. Leased railcars remain a very good investment for us. Offering attractive returns and cash flow, while the railcars are in our fleet, then the opportunity for additional profit recognition was sold to third parties including institutional investors. Last week, we were pleased to announce the extension of our strategic railcar alliance with Element Financial Corporation. As Steve indicated, this extension calls for approximately $1 billion of leased railcars to be sold to Element in 2016 to 2019. Year-to-date sales of leased railcars to Element totaled approximately $617 million, bringing the cumulative total under the existing alliance to more than $1.6 billion, since the program began in 2013. The level of interest in acquiring leased railcars remains high among institutional investors and we continue to make progress in building…

[Operator Instructions] And we can take our first question from Allison Poliniak with Wells Fargo. Your line is open.

Hi, guys, good morning.

Good morning.

Just going back on to the Element deal, I think the original commitment was $2 billion and $1.6 billion was done today. Should we assume the balance being fully completed in 2015 or is some of that moving as part of that extension at this point?

Allison, what we've said, this is James, the new agreement is $1 billion that starts in 2016. We expect to substantially complete the initial strategic alliance with Element this year. And we've given a wide range of sales which includes Element as well as potential sales to other third-party institutional investors.

Okay, fair enough. And then also you talked about I guess on a high-level changes potentially in mix. Are there any sort of line changeovers or anything that we need to be aware of in Q4 that could impact the rail manufacturing margin?

Allison, this is Steve. Sure, we have some line changeovers. I'm just so pleased with our organization's ability to make those changes effectively. We become very productive and efficient doing those. And I don't think they quite have the adverse effect that they once had. So, certainly all of that's been included in any of our projections both on the volume and operating margin standpoint.

Great, thank you.

And we can take our next question from Bascome Majors with Susquehanna. Your line is now open.

Yes. Congrats guys on another great quarter and a year that has definitely exceeded some high expectations while we are entering the year. Looking to 2016 where you gave some comments, I want to dig in a little more, what's your strategy for managing the down slope from the railcar peak that we're looking at in 2015 here or any other segments that you like to comment on?

This is Tim. As far as managing decreases in orders and demand, we're really proficient at that. We have team meetings with all of our business leaders. We talk about capacity that we have available enterprise wise as well as demand that we may have. So we really count on our manufacturing flexibility to kick in as best that we can. And then in some cases, we have to idle production lines, and as Bill mentioned we have idled a facility. And so we are highly equipped to be able to deal with the ups and the downs.

And Bascome this is Steve. Just to add on to that, certainly line changeovers and product conversions are normal course of our business and I think Trinity has proven that the breath of the entire product line for the company allows us additional flexibility. We've converted plants from producing wind towers to tank cars back to freight cars and back to wind towers. So we really are very dynamic in that regard and I think our manufacturing flexibility of our footprint really allows us to respond to shifts in the marketplace very effectively.

No understood and we've certainly seen that in the past. I appreciate that you don't want to guide anything more explicit and you gave a lot of color on 2016 already. But, from a modeling standpoint, when we think about decremental margins as revenue start to come down, should we think about kind of planning for something similar to the incremental as you achieve in the way up or is the math in there a little fuzzier and we need to consider some things that we may not be?

Well, this is Steve, again, Bascome. With respect to at least margins in the railcar business, certainly margins are ultimately going to be a reflection of the product mix that is produced in any given quarter and we're going to continue to work on productivity and improve those operating profit margins and again our team really has distinguished themselves in those achievements. I would like to also remind you that the railcars we produce or plan to produce in 2016 are for cars that we took orders for in 2014 and 2015 during very, very strong market demand dynamics. So we have expectations that we’ll continue to perform well and our business will reflect those margins.

All right, so I guess you're alluding to the pricing you'll see on that decent portion of next year's production plan that's already in the backlog will be kind of similar to the pricing that you're producing right now that's generating some of these really excellent margins?

I think, generally, yes.

Yes. This is Tim. When we were ratcheting up or ratcheting down, it's always very difficult for us to predict precisely where the margin will end up. We have a lot of competent people that are involved with this. But as we get closer, as James said at the end of the fourth quarter when we're giving our guidance, at that time we'll be able to give more specific insights on what we're anticipating as far as margins go. Right now we're just kind of talking about production planning and how we're looking at our business and what we are planning for.

Understood, I really appreciate the color today, guys. Thank you.

Thank you.

And we will take our next question from Justin Long with Stephens. Your line is now open.

Thanks and good morning, guys.

Good morning.

You gave some helpful commentary on 2016 expectations for the Rail Group but I was wondering if you could share how much visibility you have in your tank car backlog for 2016? I know there are some longer-term orders like the agreement with GATX but I wanted to get a sense of your visibility specifically related to tank cars over the next year or so?

Steve?

Sure. Justin, we historically haven't broken out our production plans and backlogs by tank car, freight car, what have you. Although suffice it to say that we're very confident about our production plans given where we are today and in our backlog we have a very healthy mix of tank cars as well as a healthy mix of freight cars.

And we do have some plants, this is Tim, we have do some plants that have been able to demonstrate that they can shift from tank cars to freight cars and this is rather new to our company over the last five years. I've been very impressed how our barge people have been able to shift from tank barge to hopper barge and how our railcar manufacturing plants have been able to shift from tank car to freight car, in fact, I think there's a shift going on right now in that particular area and that was what Steve was saying how impressed he was. I echo that.

Okay, that's helpful. And maybe to ask it a different way, you mentioned 23,000 railcar orders that you have locked in for next year. Based on that would you say that the percentage between tank deliveries and non-tank deliveries is pretty similar to what you're seeing here in 2015 or do you expect that mix to change?

Well, when we talk about the deliveries we're planning of 27,000 to 30,000 through 2016 certainly we're also seeing a shift in demand as I mentioned from the upstream energy markets to downstream petrochemical and agricultural and the automotive markets. And in there implies a shift perhaps to more freight cars from tank cars.

Okay, great, that's helpful. And last question, now that the GE fleet has been sold and we got that announcement during the quarter I was wondering if you could comment on how you think this could impact the competitive dynamics in the leasing market? Do you view this as a positive, negative or neutral to your business?

Sure. Justin, thanks. Steve again. First of all, GE has been a good customer of ours. We built a number of new cars for them. Wells Fargo/First Union has always been a good customer of ours and we currently have cars in our backlog for them as well. So I don't think it really has a material effect on our manufacturing business. And we've demonstrated on the leasing side that we have been able to compete effectively with those folks as well. So I clearly don't have any concerns from it and we're just moving forward business as usual.

Great, that's helpful. I appreciate the time.

And our next question comes from Matt Brooklier with Longbow Research. Your line is now open.

Thanks. Good morning. So kind of a follow-up question on Element. The billion dollars of extension, can you provide a little bit of color in terms of potential cadence of railcar sales to Element over those four years and maybe more color on what 2016 could look like?

Yes. Matt, this is James. We really can't at this time. We work with Element on specific portfolios as we go throughout the year. Now that we have a long-term agreement, just as we did the last two years. We will work with them to make sure that we may have diversified portfolios and we're not providing any specific guidance this early into the agreement as to what the cadence may look like. But, we're very pleased, and as Steve said delighted to continue to work with Element, they're confident in us to continue to build, deliver and manage railcars for them is very good for us.

Okay. And then I guess the extension itself, does anything change with this particular agreement the extension? I'm just trying to think about not only the sales but the profit contribution potential with this incremental billion dollars moving forward?

Yes. Matt, this is James again. I'd say generally, it's the same type of agreement, just a nice extension of what we already had in place.

Okay. On the DOT 117 orders that you took in the quarter, can you provide a little bit of color in terms of where those cars are bound from an end market perspective? And then any further update in terms of regulation and the timing of potential incremental orders would be helpful?

Matt, Steve again. Yes, we have taken orders for new DOT 117s. Those cars are all going into flammable service. And a number going into flammable service beyond crude oil, so we're certainly starting to see some of the other customers who ship flammable products make decisions about their fleets.

Okay. Appreciate the time.

Thanks, Matt.

And we can take our next question from Art Hatfield with Raymond James. Your line is now open.

Yes. Thanks. Good morning, everyone.

Good morning.

Just a couple of questions. First on the leased fleet utilization decline. Can you give us some color as to whether that's just demand related or is that part of the issue surrounding new retrofitting some of your own tank cars to meet the new standards?

Art, this is Steve. I think the answer to your question is actually, yes. It's a little bit of both where we've had perhaps some cars return to us from either ethanol or crude oil shippers and taken the advantage of the time off lease to prepare those to be ready for deployment and some of those have been cars that we have performed modifications to.

Right, thank you. And then secondly, I just wanted to touch on the Element extension as well. That $1 billion is not currently in the backlog, is that correct?

Yes, Art, this is James. Remember orders from an agreement like Element don't create backlog, orders from Element will be cars that we originate leases on. We have $1.8 billion of leasing backlog already on our books, some of that will potentially go to Element and some is to be originated most likely and some is already in our existing fleet. So what Element does is, give us confidence in capital sources as we enter the market to originate leases. So we know now that for each of the next several years we've got a good level of sales of leased railcars to a good partner.

Great, thank you. Just actually one other one, if I could, and it goes back to kind of the flexibility you have in your manufacturing operations. As you talked about in one of -- in the parts business you shuttered a facility for the moment. But as you go forward and if you start to take down lines in the railcar side or maybe close facilities there, how do you handle the labor situation? I know it's always if things were to turn on you to get quality labor back, are you able to transfer labor and if so does that create a little bit of an overhang, are you just kind of let everybody go and kind of make a long-term decision about closing the facility?

Art, Steve again. Good question. Certainly we've been very, very successful when we ramped up our operations from 2009 to the levels we are today. That's been a tremendous undertaking from our operations team and developing a highly productive labor force. And it certainly are intended towards very, very hard to try to keep that labor force in place. This is where we may be pairing that back production at our manufacturing facilities. We have some opportunities to transfer some of that labor into our maintenance services business are we are making investments, expanding operations there. So we're very, very conscious of wanting to maintain our experienced and talented labor, we'll do so as best we can.

Yes. Art, this is Tim. It's also geographically a geographical question in certain communities where we have other types of manufacturing operations occurring, then sometimes we can shift employees from one location to another location or we can do as Steve said is maybe shift a product and bring in a new product line. And recently we've been shifted a plant to where it was helping in our research and development and building some of our tooling and fixturing. So, we really look at the workforce as a resource and some value that they bring and then we deal with low type demand for products we have and what work we can place in their to maintain the highly skilled people.

Thank you so much. That's great color on that. And thanks for taking my questions.

Thanks, Art.

And we will take out next question from Eric Crawford with UBS. Your line is now open.

Yes. Thanks, good morning, guys. I guess following up on Bascome's line of questioning. I was curious about the cadence on deliveries you're envisioning for 2016. I'm sure it's flexible but as you're envisioning it now any first half, second half split would be helpful?

Are you talking about cadence of railcar deliveries or what product are you talking about?

Right. Railcar deliveries, yes.

Okay. James, you want to --?

Sure, Eric. We're not able to get cadence at this time. We certainly have production planning in place. The good thing about a backlog of more than 23,000 railcars for 2016, we certainly have some good production planning visibility. And I think I would just point back to Steve's guidance of 27,000 to 30,000 railcars next year. But at this point given product mix in those type of things we're not able to give more specifics at this time we will do that when we get to our fourth quarter conference call.

Okay. Fair enough. On leasing, what was the average length of lease term for the renewals in the quarter? Can you share that?

We don't typically share that, Eric and appreciate your interest. I will tell you, we're seeing healthy renewals both as a percentage of those cars expiring and we're also pleased with the renewal rate increases we saw in our fleet during that period.

Eric, the average remaining term has been right around 3.3, 3.4 years for several quarters now as you always have leases coming off and then putting on new leases and renewing that's been pretty steady for more than a year now.

Okay. No, thank you, I appreciate that. That is what I suspected but just wanted to confirm that. And then lastly for me, the profit in Energy Group was really strong this quarter. It sounds like the utility business is still a little competitive out there. Was it more storage or wind towers or were there any one-time items to call out there for the strength in profitability?

There are no one-time items to call out, this is Bill, for the strength. Overall, as I said earlier on our conference call script that all the businesses did particularly good. There is some weakness or tightness in the utility market but the rest of the business came along strong and cover the segment as a whole.

Fair enough. Great quarter, guys. Thanks.

Thanks Eric.

And our next question comes from Thom Albrecht with BB&T Capital Markets. Your line is now open.

Hi, guys, most of my questions have been answered. I just wanted to kind of clarify something I thought I heard. Relative to the production or delivery goal of 27,000 to 30,000 for next year, I don't know if you exactly said this or not, would you expect tanks to be about the same percentage of those deliveries as they were in 2015?

Tom, this is Steve. I don't think we gave an indication as to a split of tank or freight cars in those projections. And I think I did mention that in demand we're seeing a shift to a broader array of freight cars and that would probably manifest itself in orders and production in 2016 and 2017.

Yes. I think I did catch that, but I thought I also heard that maybe the revenue per car might be similar in 2016, 2015 despite the car type shift?

I don't.

Or did I not hear that?

I don't think you heard that, Tom.

Okay. All right, thank you.

And we will take our next question from Kristine Kubacki with Avondale Partners. Your line is now open.

Hi, good morning. I just had a question, it sounds like you do have a little bit of build slots open in the fourth quarter for 2016. How is the pricing environment out there? I mean, I know mix is a component of that that has the pricing environment softened given that things seem to be opening a little bit more in 2016?

Kristine, this is Steve. Certainly, it's difficult to make broad generalizations statements about pricing because different markets have different behavioral characteristics based upon leased fleet utilization, based upon production backlogs. In those areas where we have shorter backlogs and leased fleet utilizations, we can expect some weaker pricing. Where we see strong demand, we're seeing good pricing. So generally it's hard to make those generalizations and really looking at a market by market car type basis.

Okay. And then just a quick question, I had I think it's probably [indiscernible] but just, I guess my question is on the orders that were placed kind of in the 2013 and 2014 timeframe that you say are for delivery in 2016 now. I mean have you seen a critical mass of you said it shifted to more freight car specific? Where those kind of placed as tank cars and now being shifted to other car types? And then I guess a follow-on to that would be -- have you had many push out in terms of are you working with customers to delay delivery into 2017 and beyond?

Thanks, again, Kristine for the question. This is Steve. We answer the last question first of. Our projections reflect any conversations we've had with customers who are trying to accommodate their delivery time and that really is a normal course of business for us. These railcars many times are tied to the completion of capital expansion projects and the timing of those railcars has to coordinate with production for customers so that is not an unusual activity for us. And again that projections that we've given to you for our plans next year include any consideration in that regard. The first part of your question we're really, the orders that we're referring to orders taken in 2014 and 2015 for production in 2016, while there was significant tank car orders the first this time we also took a number of freight car orders there reflecting interest in the downstream petrochemical markets and those are also railcars that will be producing in 2016.

Okay. That's helpful. Thank you very much for the time. I appreciate it.

And we can take our next question from Cleo Zagrean with Macquarie. Your line is open.

Good afternoon, good morning, thank you. My first question relates to the leasing portfolio and to the comments you just made in terms of different behaviors by different markets. Can you just talk about broadly how much of your portfolio is exposed to -- tied to these upstream markets that are slowing versus the growing areas that you mentioned downstream petchem and compare how lease renewals are performing in each of the two areas? Thank you.

Cleo, this is James. We did not, nor do we disclose specific car types in the portfolio other than that it's a very diverse portfolio. In any given year we have a certain number of leases that expire and are up our renewal, we're very successful in that respect with an average lease term of 3 to 3.5 years about 15% to 20% roll over in any given year and that's across all car types. So as Steve said certain markets have their own characteristics in any different type of cycle. We have given some indication of how many cars we have in flammable service which is between 11,000 and 12,000 but beyond upstream and downstream and other car types, we just don't get that specific but it's a broad mix of cars and we're pleased with the diversification that our team has put together.

Maybe again, I would reiterate earlier that I said, we're very pleased with our renewal activity, it was a high percentage of the cars that were expiring and we're very pleased with the renewal rate increases we saw on those cars.

Okay. Thank you for that. Then my second question relates to institutional interests. I'm wondering what are the dynamics that in order to be in -- perhaps slowing the speed at which these deals could be signed, would you be especially setting a reference point in the market at leased. Why there may be what I perceive was a wait-and-see attitude. Is it people are looking to see where demand shapes -- enters the demand into 2016 thinking every time China cuts rates real asset portfolios to appear more and more attractive?

Cleo, this is Steve. I said, first of all, I think the acquisition of the GE fleets by Wells Fargo First Union continues to reflect strong interest in these types of assets. And certainly Wells Fargo is a very, very fine financial institution. There continues to be significant institutional capital interest in investing in this asset class. What we're really looking for is institutional investors that have a long-term perspective on the business and who are prepared to work with us on a long-term basis. I think there's a lot of institutions who would like to buy railcars near-term really looking to develop long-term partnership's to support our railcar investment platform and those are the type of investors that we continue to talk with and as we have other partnership's developed we'll bring those to the market and make those announcements at that time.

And do you see yourselves possibly co-investing with them or you think this is of course capital to go to other areas?

Clear, this is James. I don't think we're at this point ready to talk about what future plans might be. But we certainly invested with our partners in the past and we've done investment vehicles where we're not an investor, but as we said, we have a large wholly-owned leased fleet a partially owned leased fleet and the nature of these transactions going forward is to be determined. It's a very dynamic good market for us.

My last question, at an industry conference last week, there seem to be a very dynamic debate about boxcars with some railroads trying to encourage their customers to order homogenous type for their operations and even suggesting they might be willing to support mini bubble through encourage that replacement whereas other opinions were that we are not in a boxcar shortage, but railroad speed shortage or turnover shortage. So what do you think that particular car type shaping up in terms of demand and how are you looking to potentially participate in that? And thank you very much.

Sure, Cleo, Steve again. I think is important to recognize a long-lived assets and I think decisions that are made to invest in these assets have to have a long-term perspective often many times we hear comments about what's going on in the spot market tends to influence some people's long-term perspectives. More importantly I think with respect to boxcars, is an aged fleet, it has not seen much investment over recent years and inevitably I think there will be additional investment in the boxcar fleet.

I'm sorry forgot to ask about, you mentioned the proposed life extension for 65 years and what could that do to orders?

At this point, Cleo, I really don't have an opinion on that. I mean railcars statutory life is 50 years as it is. So, that's still an awfully long time. Perhaps when you're looking at modifications and making investment in existing cars, the extended life helps the analysis.

Thank you very much.

And we can take our next question from Steve Barger with KeyBanc Capital. Your line is open.

Hi, thanks. First as a clarification. If I heard right you expect deliveries of 27,000 to 30,000 next year and 23 of those are in backlog right now; is that right?

That's correct.

Is that outlook based on you maintaining current market share for new orders plus or minus?

Steve, you've been kind of following us for a long time you know that we don't really drive our business based upon market share. But, certainly, even at these demand levels, we have confidence that we can achieve our plan of producing between 27,000 and 30,000 railcars in 2016.

Right. Well and I guess just from a planning perspective, do you expect that most of the orders you take next year will be for delivery next year or are you expecting to take them across the spectrum of multiple years?

I think it's most likely a spectrum over multiple years again, it ties to win capital projects are being completed for our customers. And there's an awful a lot of spending still going on in the Gulf Coast with projects coming on stream between 2016 and 2019. And so, we're going to stage our production and deliveries to meet the needs of our customers which ranges over a period of time.

Got it. Next, capital allocation question. Obviously, you have a lot of current liquidity, a lot of cash flow in backlog. I'm sure you're seeing deals come across your desk. Can you talk about the revenue range for those deals in general from a small into the big end?

Steve, this is James. You seeing us with acquisitions in the relatively small level about $20 million, $30 million, $40 million transactions we did early in 2014 as large as the $600 million Meyer Steel Structures acquisition we did August last year. So, we got a wide range as Tim talked about we're looking for organic growth opportunities, acquisition opportunities as you said if they come across our desk. We do have good capital that we can invest and we continue to generate good cash flow. We've done well in the share repurchase this year in terms of how much of authorization we have used. We have raised our dividend. And we continue to invest in maintenance CapEx and growth CapEx internally here. So it's a broad spectrum of opportunities in front of us and as a management team sits and works with our board, we consider those things that we can go out and seek proactively and those things that we see in the market as well.

Yes, the motivation for the question was just trying to think about the high-end. Would you do $600 million plus deal or $1 billion deal if you found something attractive or do you really favor smaller deals where you can just tuck things in?

This is Tim. It's really about the quality of the fit and the quality of the company and the value that we think the entity will bring to us. We do have a preference for larger deals. We're very pleased with the deal we did last year. So we'll -- we're out their fishing and we don't hesitate to bring in a big fish or if there's a smaller fish that's going to have a lot of value them we'll bring that one is as well.

Got it. And last question, you paid down about $300 million in debt this year and leverage on the wholly-owned leased fleet has been coming down. What's the thought process behind reducing debt versus putting that cash towards the buyback or just keeping it on the balance sheet?

Well, Steve, I think -- this is James. Certainly some has gone to share repurchase as well as reinvesting in our leased fleet and other types of things we have done this year including organic CapEx. The debt paid down for opportunistic there are some scheduled amortization we had some opportunistic debt repurchases early in the year that gives us a nice number of unencumbered leased railcars which is about $1.5 billion right now as you see in our 10-Qs quarter-to-quarter. That allows us to really be able to have nice diversified offerings for our railcar investment vehicle partners. So as those investors see new cars coming off the production line, having railcars unencumbered also allows us to offer those in that same portfolio. We would not hesitate to use some leverage as we have in the past if we have the opportunity and need the capital but right now we have been able to generate cash flow to cover those needs this year.

Got it. Thanks for the time.

Thanks, Steve.

And we will take our next question from Mike Baudendistel with Stifel. Your line is now open.

Thank you. Just wanted to ask you, is there much difference in the cost structure of your various railcar manufacturing facilities? And if so, is there any opportunity to produce with the decline in railcar production next year to produce fewer cars at the higher cost facilities or is that something that comes into play?

Sure, Mike, this is Steve again. We're constantly evaluating and optimizing our production mix, different competencies, different skill levels, different cost and also access to market. So, those are all considerations but conceivably, yes, we have that ability to optimize.

Okay, great. And then also I wanted to ask you on the leasing -- the lease rates you've provided, if you get to a point, could you see a point next year or so where lease rates continue to come down and then it wouldn't make it economic to put additional cars in your leased fleet. It doesn't sound like from your prepared comments that you had any changes to strategy in terms of managing your leased fleet?

Mike, Steve again. It's hard to answer that question, but in general, I think we have to put the market conditions into general perspective. From a historical perspective railcar productions expected to be greater than historical averages. We still have very strong fleet utilization and we still have extended backlogs. Typically those are underlying fundamentals for a good renewal rate increases and overall solid railcar leasing. Obviously, when you look at different car types there's different dynamics in each one of those.

Yes. This is Tim. Also the railcars are a long life asset as you all are talking before and during time periods where we have customers that we've done business with for quite a while and they've got good credit ratings and their wanting to place cars and the market conditions are such that we may not be able to get as much as we were able to attain in a higher market. We'll go ahead and lease the car for shorter period of time. We did that in the 2008, 2009, 2010 time period and a lot of those leases expired in the 2012, 2013, 2014 time period. And we were able to renew them at higher rates. And we look at it as a long life asset. And so we stay in the market during pretty much good seasons and the slower time periods.

Great, that's helpful. That's all for me. Thank you.

And we will take our last question from Bill Baldwin with Baldwin Anthony Securities. Your line is now open.

Hi, good morning, gentlemen.

Good morning.

Steve, did I hear you say, or am I just thinking this, that you're seeing some productivity improvements in your Meyer Steel operation?

I think it would be Bill.

Bill, I'm sorry. I'm sorry.

We certainly have -- we now have Meyer right out of the year and have had an opportunity to have the Trinity manufacturing team assist the Meyer team with efficiencies and ling layouts where we can -- we complete what we see. The market itself is still tight and highly competitive but I like what I'm seeing on the shop floor.

Are we fairly early on you think, Bill in our learning curve there, in our lean manufacturing issues there with Meyer? Is there more to come?

Yes. I think -- call it third, fourth or anyways, we still have got a lot of opportunity to go but I'm pleased with what we've done so far.

An amazing thing about lean is, you put a new group of people looking at a production process and the ideas that they come up with. We've been practicing this in my career for 20-30 years at least. And our people come up with some very clever innovative ways of streamlining and reducing cost and enhancing the quality of the products, so there's really never an end to that I don't think the game ever stops.

You've shown that with your manufacturing in the railcar area, Tim and Steve, that's for darn sure.

Yes. Thank you.

As far as the plants that came with the Meyer acquisition, Bill, are you still basically operating out of those same plants or has that changed somewhat also in terms of railcar a bit?

There were four facilities that came with the Meyer transaction and then Trinity had one facility. We have announced a one notice for one shift at one of the four Meyer facilities right now just as we optimize the production for the demand that's in the marketplace as well as the delivery area for the products that are being ordered.

Okay. And Steve, I might have missed this but a couple of housekeeping items, did you indicate how many cars were shipped to the leased fleet from your railcar manufacturing this quarter?

I don't think I mentioned that but we certainly have that number available.

It's about 2300, so, it's about -- running about 30% which is normal for us, Bill, this is James.

Okay. Okay. And do you all disclose how many cars were sold out of the fleet or is that just a dollar number?

It's more of a dollar number. Again this quarter you had a general offset you invested about $220 million you sold about $218 million, so a general offset. But we don't get quite that granular.

Okay. Good job.

Thank you, Bill.

Thank you.

Okay. With no more questions, that concludes today's conference call. A replay of this call will be available after 1:00 o'clock Eastern Standard Time today through Midnight on October 30, 2015. The access number is 402-220-0116. Also the replay will be available on the Web site located at www.trin.net. We look forward visiting with you again on our next conference call. Thank you for joining us this morning.

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